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Canada (161,369)
MCS 3040 (228)
Chapter 23

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Department
Marketing and Consumer Studies
Course
MCS 3040
Professor
Joseph Radocchia
Semester
Fall

Description
Chapter 23 Sales & Marketing: The Contract, Product, & Promotion What is Marketing Law?  Marketing practices just like other business aspects, are directly influenced by laws & regulations  Marketing laws are regulated by all 3 levels of government : federal, provincial & municipal  Main objectives of the law are to  Protect consumers from physical harm  Foster fair competition  Protect consumers from unfair selling practices  Objectives give rise to laws regulating a lot of conditions & warranties  If a business sells products internationally, they are subject to the laws & regulations of that country as well Marketing Law: The areas of the law that influence the creation, promotion, pricing & distribution of goods, services or ideas (The 4 P’s) Contract Law There are several key aspects of the contract of sale that should be paid special attention to… Terms relating to the product  When customers make a purchase they have expectations about the products attributes  Whether those expectations are protected from a legal perspective is a different matter  The foundation of the common law concerning the product is covered by the phrase “let the buyer beware” or “let the buyer take care”  Common law requires buyers to be aware of what they’re purchasing, and to make appropriate investigations before buying  If the buyer wants product to have certain characteristics the common law requires that expectation in a contract or else buyer is left without remedy if there’s a problem Sale of Goods Legislation in Canada  The law governing sale of goods is a specialized branch of contract law  Under the “sale of goods” legislation, “goods” generally means what it meant at common law: personal property in its tangible, portable form as well as items attached to the land that can be severed  Unless the parties expressly agree to the contract or are otherwise able to exclude the operations of the Sale of Goods Act, a number of terms are automatically implied into their contract  Legislation implies terms and also classifies them as either conditions or warranties Conditions  The seller has the right to sell the goods  The goods will be reasonably fit for the intended purpose where the buyer expressly or by implication, makes it known what the intended purpose is  The goods will be of merchantable quality, where the goods are bought by description (reasonable quality considering the price paid)  Where the goods are sold by sample, the goods will correspond to the sample that the buyer will have a reasonable opportunity to compare the goods with the sample  Where the goods are sold by description, the goods will correspond with the description Warranties  That the buyer will have & enjoy quiet possession of the goods which means that usually 3 parties will not claim rights against them rd  Goods are free from liens and encumbrances in favor of 3 parties that were not declared or known to the buyer at the time to contract was made Remedies  Classification of the relevant term of the contract is essential to determining the remedy that a curt is entitled to give the disappointed buyer  Breach of a condition – whether the sale of goods contract or not – may give the innocent party the right to not only claim damages but to reject the goods and treat contract as needed (right of repudiation)  When a warranty is breached, the sale of goods legislation permits the buyer to maintain an action for damages or ask the court to reduce the purchase price due to the breach  The buyer cant return the goods & is obligated to continue w/ contract Limitations of Sale of Goods Legislation The legislation…  Generally only applied to sale of goods, not land or services  Requires there to be privity of contract between customer and the offending party. Breach of warranties by the manufacturer are not covered  Permits contracting out of the implied terms (buyer and seller can agree to the terms that wont apply)  Doesn't address pre-contractual representations made by the vendor Consumer Protection Legislation  All provinces have supplemented the traditional Sale of Goods Act w/ legislation that effectively prevents the express exclusion of implied conditions and warranties in consumer transactions  All provinces have enacted broader consumer protection legislation  The legislation also eliminated the sometimes artificial distinction between warranties & conditions by implying warranties into protected transactions and providing specific remedies in the event of a breach or implied warranty (remedies depend on seriousness of breach) Greater protection is offered in this then sale of goods statues by way of ..  Stronger warranties w/ respect to the quality and fitness for purpose  A warranty of durability to ensure the goods are merchantable and fit for a reasonable amount of time  A warranty of reasonably acceptable quality of service  A provision that makes all representation designed to include a customer into a transaction, whether written, oral or otherwise, into express warranties given by the seller to the buyer Transfer of Title  Ownership entails control over the property but also involves the risk of loss from damage or destruction  Transfer of title or ownership of goods from the seller to the buyer is fundamental to the sales transaction and has an impact on a number of business controls especially the transfer of risk  The best way for parties to ensue clarity of who is the owner is to write the contract in a way that specifies when an d how ownership moves from the buyer to the seller  If they fail to do so there are statutory provisions that resolve the issue The provincial sale of goods act sets out a series of rules that determine when title changes in the absence of terms of a contract Specific Goods: Goods that are identified & agreed on at the time a contract of sale is made Unascertained goods: Goods not yet set aside and identifiable as the subject of the contract at the time the contract is formed Rule #1  Where this is an unconditional contract for the sale of specific goods in a deliverable state, the property in the goods passes to the buyer when the contract is made and it is immaterial whether the time of payment or the time of delivery or both is postponed Rule #2  Where there is a contract for the sale of specific goofs & the seller is bound to do something to the goods for the purpose of putting them in a deliverable state, the property doesn’t pass until te thing is done and the buyer has received notice Rule #3  Where there is a contract for sale of specific goods in a deliverable state but the seller is bound to weight, measure, test or do some other act or thing with reference to the goods for the purpose of ascertaining their price, the property doesn't pass until such act or thing is done and the buyer has received notice. Rule #4  Where goods are delivered to the buyer on approval or on “sale or return” or another similar term, the property passes to the buyer  When she signifies her approval or acceptance to the seller or does any other act adopting the transaction  If she doesn't signify approval/acceptance to the seller but retains the goods without giving notice of rejection, when a time that has been fixed for return of the good expires, & if no time ahs been fixed, on the expiration of a reasonable time Rule #5  Where there isn’t a contract of sale of unascertained or future goods by description and goods of that description & in a deliverable state are unconditionally appropriated to the contrac
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